The Asian Development Bank (ADB) has lowered its economic outlook for Southeast Asia to 4.0% in 2021 compared with an earlier forecast of 4.4%. Cambodia is preparing to be ASEAN Chair next year when regional economic activity is expected to recover to 5.2% growth.
The lowering occurred as the ADB downgraded forecasts for Indonesia, the Lao People’s Democratic Republic, Malaysia, Thailand, Timor-Leste, and Viet Nam. However, Singapore’s outlook was upgraded.
The report forecasts inflation in Southeast Asia to be slightly lower at 2.3% in 2021 and unchanged at 2.4% in 2022 as consumer demand remains weak. However, higher international oil prices are applying pressure on prices for goods and services, the development bank forecast.
However, Cambodia’s international business community remains ‘bullish’ on the local economy despite the recent GDP growth downgrade citing an ultra-fast vaccination drive and multiple bilateral and multilateral trade agreements to be implemented next year.
Gross Domestic Product (GDP) growth is forecasted to be 2.5% this year, down from the previous projection of over 4%. The downgraded has been forecast as investors ‘wait and hold’ due to ongoing COVID border and business restriction causing uncertainty in Cambodia’s economy.
Yasuyuki Sawada, ADB Chief Economist said: “Asia and the Pacific’s recovery from the COVID-19 pandemic continues, although the path remains precarious amid renewed outbreaks, new virus variants, and an uneven vaccine rollout.”
“On top of containment and vaccination measures, phased and strategic rejuvenation of economic activities—for instance, trade, manufacturing, and tourism—will be key to ensure that the recovery is green, inclusive, and resilient,” he added.
Cambodia is committed to strengthen and promote peace, stability, security, and prosperity in the ASEAN region for the people’s well-being.
According to the government-run news outlet AKP, Prime Minister Hun Sen said: “Cambodia is ready to take the chair of the ASEAN community in less than five months from now”.
Adding, Cambodia’s intention to accelerate the process of ASEAN Community building by focusing on achieving key goals and initiatives already agreed under the detailed plans of the three ASEAN pillars by 2025, including the Master Plan on ASEAN Connectivity 2025 and the Initiative for ASEAN Integration (IAI) Work Plan IV.
“At the same time, we are committed to making ASEAN an important region for trade, investment, and global supply chains by maximizing the benefits of existing free trade agreements and the Regional Comprehensive Economic Partnership (RCEP) recently signed,” PM Hun Sen said.
“As we prepare the groundwork for the ASEAN Community’s Post-2025 Vision, Cambodia will continue to push for a more vibrant and harmonious ASEAN Community. We will strive to enhance the protection of migrant workers and increase support for a green and inclusive development agenda. The transition to digital technology for micro, small and medium enterprises (MSMEs) and women and youth entrepreneurship are the areas on which we need to focus,” PM Hun Sen added.
PM Hun Sen stated that MSMEs are the backbone of Cambodia’s economy and represent 99% of all business entities, mostly owned by women (60 percent in Cambodia) and employ more than 80 percent of the labor force in the ASEAN member countries.
Adding, that supporting this sector will not only help restore and promote sustainable economic growth but also ensure that we do not fail to achieve the United Nations Sustainable Development Goals.